Archive for January, 2016

Mike Lofgren is a Washington insider. He was a Republican congressional staff member for 28 years, including 16 years as a senior analyst on the House and Senate budget committees.

He has written a book, THE DEEP STATE: The Fall of the Constitution and the Rise of a Shadow Government, about governmental and private institutions that operate above the law, and independently of the will of the citizens, and how they interlock in ways that mutually reinforce their power.

The Deep State includes the bankers who were prosecuted for financial fraud because they were “too big to fail” and CIA torturers who were not prosecuted or dismissed because that would demoralize the agency.

It is the force that makes the government engage in bank bailouts, warrant-less surveillance and undeclared wars. It is the force that has made the American public accept endless war and economic stagnation as normal. It is the explanation of why partisan gridlock and financial sequesters never affect the availability of money to subsidize foreign military forces.

Lofgren’s Deep State includes President Eisenhower’s “military industrial complex”, the FBI, CIA and NSA and their supposed overseers in Congress and the federal courts, Wall Street and its supposed overseers in the Treasury and Justice departments, and Silicon Valley.

They work together, and have revolving doors through which people can move from one to another—for example, General David Petreaus, after his retirement from the military, to a seven-figure job at KKR, a Wall Street private equity form.

None of this is the result of a conscious conspiracy, Lofgren wrote. It is a natural evolution of power without accountability, and the “group-think” of people who never have their assumptions questioned.

Young voters vote for Democrats by large majorities—when they vote. The question for the Democrats is whether any candidate will generate enough enthusiasm among Millennials to make a difference.

As Chuck Bodd pointed out on Daily Kos, voters under 30 gave Barack Obama his margin of victory in both 2008 and 2012. My own opinion, like Bodd’s, is that Bernie Sanders is the only Democratic candidate with a chance of doing that.

The difference between Sanders and Obama was that Obama was the candidate supported by idealistic young people, but he also was the candidate of Wall Street and Silicon Valley. When forced to choose, he went with Wall Street and Silicon Valley.

The kinds of Democrats who go to college, get an entrepreneurial career or move to a big city — those who embrace a relatively unpredictable life — want an entirely different role for the federal government: they want the state to invest in modernization, with more high-skilled immigration, expansive free trade agreements, and performance-based charter schools.

Startup founders and college-educated liberals fundamentally reject an atomistic conception of Society: government should be involved in personal decisions, such as finishing school or eating healthy, because they believe that personal decisions ripple out and significantly affect most people in Society.

Economically, the technology industry exacerbates inequality between the rich and middle-class, but eradicates poverty by making essential goods freely accessible. Ultimately, this will trend toward a two-class society of extremely wealthy workaholics who create technologies that allow the rest of society to enjoy leisurely prosperity. The cost for this prosperity will be inequality of influence

A San Francisco journalist named Gary Ferenstein says the Democratic Party is no longer the party of factory workers and organized labor. It is the party of college-educated professionals and high-tech companies, he says, and this is a good thing.

He has published a manifesto on behalf of the Silicon Valley Democrats—which include Barack Obama and Hillary Clinton—and against “protectocrats” such as Bernie Sanders and Elizabeth Warren.

While not all Silicon Valley entrepreneurs and professionals think alike, any more than labor union members, white people or any other large category of people do, I think that Ferenstein does speak for many people from that background, and that his ideas are worth discussing.

His basic idea is that the government should give free rein to creative entrepreneurs, while trying to change individual behavior so as to make people more productive. The high-tech start-up corporation is his model for all the institutions of society.

Unlike the typical neo-liberal, he does not advocate allowing people to fend for themselves. Government should assure everyone an adequate education, adequate medical care and everything else they need to be economically productive.

Click to enlarge.

He believes that the key to better education and better public health services is internal competition. He therefore favors Obamacare over a universal single-payer system, and charter schools over universal public education.

This is a form of radicalism that has appeared time and again in modern history—a radicalism that would revolutionize the way people live, yet leave the structure of political and economic power unchanged.

Ferenstein asserts that change is always good, there are no fundamental conflicts in society and education is the solution to all problems. Nobody struggling to survive in today’s harsh economy would believe any such thing, but I’m sure that there is a constituency that does.

He deserves credit for making that constituency’s assumptions explicit, and showing how they influence the Democratic Party leadership.

What follows is more of Ferenstein’s Silicon Valley manifesto, my comments and links to the full text of his writings.

Two researchers at Princeton University published a study last November indicating that the death rate for middle-aged white Americans was on the increase.

Statistical blogger Andrew Gelman analyzed the figures and concluded that the increase is concentrated among white women in the South.

Click to enlarge.

One thing he did was to adjust the figures according to age. Not everybody in an age group, such as 55 to 64, is the same age, and changes in age distribution can skew the figures over time.

The top chart shows the results of Gelman’s adjustment and analysis.

The Princeton study said the main causes for the increased death rate were drug-related (overdoses), alcohol related (liver disease) and suicide—all indicators of despair. An earlier study said higher mortality among white women was correlated with lack of education and heavy smoking.

Why would this affect Southerners, whites or women more than other Americans? I don’t know. I’m pretty sure, however, that southern white women, like other Americans, would be healthier and happier in a high-wage, full-employment economy.

I can’t get my mind around the recent report by Oxfam that 62 families have greater combined wealth than half the world’s population, which is between 3 billion and 4 billion, and that 1 percent of the world’s population has greater wealth than the remaining 99 percent.

I can’t reconcile this with studies by people such as Hans Rosling and Max Roser showing that the overall well-being of the world’s population is improving.

But you can’t have equality of opportunity without equality of starting points.

Nor can you have equality of bargaining power, nor equality of political power.

Click to enlarge.

An American with growing up in a poor neighborhood in a big city, or in a poor, isolated rural area, with parents who are unemployed and poorly educated, does not have the same opportunity to rise in the world as I did, as a boy born to middle-class, college-educated parents in a small town.

Nor did I myself have the same opportunities as the sons of millionaires, such as George W. Bush, Mitt Romney or Donald Trump.

I don’t think that this is something you can change, at least not in a fundamental way within our existing system.

There are things that can be done to increase equality of opportunity without changing cash income. These include services—help to pregnant mothers, public schools, nutritious school lunches, public libraries, higher education—that are equally available to everyone.

Click to enlarge.

They also include laws to protect people from being denied opportunities because of race, religion, national origin, gender, or sexual orientation.

But the completely level playing field does not exist. A certain degree of inequality of opportunity is inevitable in a free enterprise society, as is a certain degree of inequality of political power.

How do you strike the balance between rewarding people for what they actually accomplish, and judging their accomplishments based on the obstacles they have had to overcome?

I don’t have a good answer for this. What is reasonable to expect is that (1) a smart ambitious person starting out at the bottom of the income scale should do better than a lazy ignorant person starting out at the top of the income scale and (2) all hard-working, honest people should be able earn enough to provide a decent material standard of living.

American military strategy is based on air power. In every military action since the Korean Conflict, the United States ruled the skies.

Two things could threaten this. One is an oil shortage or lack of access to oil, which doesn’t seem to be a problem for the foreseeable future. The other is a loss of the U.S. technological edge, which, according to a writer named David Archibald, is a real possibility.

The U.S. Air Force latest fighter-bomber, the F-22 is a superior aircraft, but it takes 42 man-hours of maintenance for every hour in the air. F-22 pilots are restricted to 10 to 12 hours of flying per month, much less than required to maintain proficiency, because its operating cost is $58,000 per hour.

The F-35 on paper is a science-fictional wonder plane. It has stealth capability. Its computerized helmet supposedly gives pilots 360-degree vision and the ability to share data instantly with commanders and other pilots.

But, according to recent reports, it is like the F-22, only worse. First planned in 2001, it still is not ready. Development is more than $200 billion over budget. It lacks maneuverability. It doesn’t fly in cold weather. The computers lack software pilots say they need for combat. The ejection seats don’t work. The fuel tanks are vulnerable to lightning strikes.

But the Air Force is committed to it. The main argument, according to Archibald, is the lack of a Plane B. That, and the sunk costs and the jobs and profits that will be lost of the F-35 is canceled.

I’m reading THE DEEP STATE: The Fall of the Constitution and the Rise of a Shadow Government by Mike Lofgren, a veteran Republican congressional staff member. He wrote the following on pages 32-33:

Other than the two-year period after his inauguration, when Democrats held both the House and the Senate, President Obama has not been able to enact most of his domestic policies and budgets. Because on incessant GOP filibustering, not only could he not fill numerous vacancies on the federal judiciary, he could not even get some of his most innocuous presidential appointees into office. Democrats controlling the Senate during the 113th Congress responded by weakening the filibuster, but Republicans inevitably retaliated with other parliamentary delaying tactics.

Despite this apparent impotence—and defenders of the President are quick to proclaim his powerlessness in the face of ferocious Republican obstruction—President Obama can liquidate American citizens without due process, detain prisoners indefinitely without charge, conduct “dragnet” surveillance on the American people without judicial warrant and engage in unprecedented—at least since the McCarthy era—witch-hunts against federal employees through the so-called Insider Threat Program.

Within the United States, we are confronted with massive displays of intimidating force by militarized federal, state and local law enforcement.

He goes on to write about how rich rewards are necessary to motivate people to found start-up companies, and how successful start-ups are good for everybody. I think that is true as far as it goes, but I don’t think it addresses the real driving forces behind today’s increasing inequality.

I’ve written a good bit on this web log about economic inequality, but my concerns have been less about successful business founders and more about the following:

Wall Street speculators who get rich at the expense of the public, sometimes by breaking the law, and not only go unpunished, but shift the burden of their losses onto the general public.

Executives of business corporations, government agencies and so-called non-profits who milk the system to increase their own incomes and the incomes of their cronies, while imposing austerity on those who do the actual work.

Crony capitalists whose wealth is based on personal connections, especially with politicians and government officials, rather than creating value.

All this is made worse by rich people who turn their wealth into political power, which they use to destroy the social safety net, starve public services, weaken labor unions and subsidize corporations..

That said, Paul Graham raised a fair point, which I want to discuss. He pointed out that there is a difference between those who get rich by playing zero-sum games at other people’s expense and whose who get rich by creating value.

I agree. I think there also is a difference between those who participate in zero-sum games with each other, such as those who participate in high-stakes poker games, and those who participate in zero-sum games with the general public, such as the sub-prime mortgage speculators.

People who create value deserve to be rewarded. People who make a maximum effort and an important contribution to society deserve more than people who make a minimum effort and a routine contribution. But I don’t think the rewards system should be structured so that the former get virtually everything and the latter virtually nothing

Erica enjoys the theatre and animated films, would like to visit south-east Asia, and believes her ideal partner is a man with whom she can chat easily.

She is less forthcoming, however, when asked her age. “That’s a slightly rude question … I’d rather not say,” comes the answer.

As her embarrassed questioner shifts sideways and struggles to put the conversation on a friendlier footing, Erica turns her head, her eyes following his every move. It is all rather disconcerting, but if Japan’s new generation of intelligent robots are ever going to rival humans as conversation partners, perhaps that is as it should be.

Erica, who, it turns out, is 23, is the most advanced humanoid to have come out of a collaborative effort between Osaka and Kyoto universities, and the Advanced Telecommunications Research Institute International (ATR).

At its heart is the group’s leader, Hiroshi Ishiguro, a professor at Osaka University’s Intelligent Robotics Laboratory, perhaps best known for creating Geminoid HI-1, an android in his likeness, right down to his trademark black leather jacket and a Beatles mop-top made with his own hair. [snip]

The Federal Reserve System pumped billions of dollars into failing banks by buying up their toxic assets, and pumped up the stock market by holding down interest rates to as near as zero as possible.

This benefited Wall Street and the big banks, but, as the chart above demonstrates, it didn’t help the real economy much.

The top line on the graph shows the amount of money the Fed pumped into the banks. The next line shows the amount of new money that actually went into circulation. The third line shows the amount of loans the banks made. The line in the second chart shows the rate of inflation by the most conservative measure.

A lot of individual savers bought stocks and bonds because their banks wouldn’t give them any interest on their savings accounts. This would have been a good thing if the money that went into the financial markets had been invested in starting or expanding businesses, but this didn’t happen.

Corporations are sitting on trillions of dollars in cash.They understand that the speculative boom sparked by qualitative easing is bound to crash.

In his lifetime, Martin Luther King Jr. was a hated and feared radical, with reason. Many of those who honor him today today were, or would have been, violently against him had he lived.

J. Edgar Hoover regarded him as a dangerous Communist, much as Hoover’s successors regard the #BlackLivesMatter movement today.

He is remembered today by many as a nice man who thought that people should be judged as individuals and not by race, and that black people should not engage in violent protest. He is honored by the kind of people whom he fought in his lifetime.

What’s forgotten is his call for radical social and political change, his advocacy of labor rights and his unconditional opposition to war.

He advocated economic justice as well as civil rights. and spoke almost as often in union halls as in churches. His “I Have a Dream” speech was given at the 1963 March on Washington for Jobs (my emphasis) and Freedom. Dr. King was murdered in Memphis, Tenn., while on a mission to support striking garbage collectors.

He turned against President Lyndon Johnson, the greatest presidential champion of civil rights since President Grant, because he could not be silent in the face of war and massing killing in Vietnam.

The best way to honor Dr. King is to oppose the things that he opposed and to do the things that he did.

Andre Malraux once asked a Catholic priest what he had learned about people in 50 years of listening to confessions. The priest replied that (1) people are much more unhappy than you would expect and (2) there is no such thing as an adult.

I thought about this when I read a blog post entitled How Bad Are Things? by a psychiatrist named Scott Alexander. However bad things are, it’s highly unlikely you’re the only one (of whatever it is).

Now private enterprise is doing the same thing in the United States, and I can only guess what the National Security Agency has been doing all along.

What bothers me is that I don’t see any obvious way to put a stop to this. You can pass legislation to require that certain categories of information, such as medical information, be kept confidential. But I don’t see how you can stop private companies or government agencies from correlating publicly available information and drawing conclusions from it.

If I were a police officer responding to a call, I would want all the background information I could get on people I was going to be dealing with. Ideally, this would benefit all concerned. In practice, there would likely be many false positives about threats with potential to cause over-reaction.

The most worrisome thing is the idea of assigning each citizen a “threat score” based on the judgement of some unknown person or, worse still, a computer algorithm, which determines how the person will be treated by the criminal justice system. Intrado, which sells the Beware software, says its formula for calculating the “threat score” is a trade secret.

The fundamental fallacy which is committed by almost everyone is this: “A and B hate each other, therefore one is good and the other is bad.”==Bertrand Russell, in 1956

Execution in Saudi Arabia

One thing to remember about the escalating Saudi-Iran conflict is that the two sides are more alike than they are different. Both are countries in which you can be executed for expressing forbidden political or religious opinions.

The Iranian government has denounced Saudi Arabia for its execution of the dissident Shiite cleric Nimr al-Nimr, along with 46 other opponents of the regime. But the Iranian government in fact executes more people in any given year than the Saudi government.

Execution in Iran

The world death penalty leader is China, followed by Iran as No. 2 and Saudi Arabia as No. 3.

The Saudi government executes people by be-headings, which is gruesome but, if done by a skilled headsman, is relatively quick, even compared to U.S. electrocutions and chemical injections.

The main Iranian method of execution is by slow strangulation, which can take as long as 20 minutes.